Credit Account Minimum Payment...LOL!

[kranky]

I always sign up for these deals, 12 months, 24 months zero interest if you pay the balance by the end of the credit term when I buy expensive items. I bought a bed, did the same thing as OP. I installed new carpeting in a rental unit, opened up a home depot credit card. I bought a dishwasher from Sears, new Sears account. Everything is paid for before interest charges start and I then close the account. I love it.

Probably want to be careful with automatically taking those deals. I have read where it can hurt your FICO if the 0% deal is processed through a "consumer finance" outfit such as CitiFinancial (now called OneMain Financial). It might be a 0% deal but FICO sees it on a par with having payday loans on your report. I'd want to know who's handling the loan before signing up.

 

[Train]

I'd make 23 minimum payments, then pay off remaining balance on the 24th month.

Actually I'd probably pay it off in the 23rd payment, you dont want to risk some weird edge rule where they backload all the interest if it's not paid off in exactly 24 months from the date you bought it.

 

[NetWareHead]

Probably want to be careful with automatically taking those deals. I have read where it can hurt your FICO if the 0% deal is processed through a "consumer finance" outfit such as CitiFinancial (now called OneMain Financial). It might be a 0% deal but FICO sees it on a par with having payday loans on your report. I'd want to know who's handling the loan before signing up.

Interesting. Do you have a link or can you explain a little further what these "payday loans" are? I've done this type of practice a ton of times with various vendors but I have a great credit report.

 

[drebo]

The worst part is you spending $2,800 on a bed. I hope that included mattress, box spring, carved oak bed frame, two night stands, deluxe mattress pad and sheets, and monthly door-to-door mattress flipping service. Oh right, today's mattresses are "no flip."

Meh, our old bed was terrible (6-year-old Big Lot's $199 special.) Neither me nor my wife were sleeping through the night. Since we found out she's pregnant, I wanted to do right by her and get a bed she would be comfortable in. This was the one she wanted.

Eastern King, box set, sheets, pillows, frame, and delivery included.

Also, had there not been a 24-month interest-free offer, I would have paid cash. It's just nice to not have to tie up all that cash all at once.

 

[OILFIELDTRASH]

Yes many people are terrible with finances. To spend $2800 on a bed set without being able to pay it off cash seems kinda wacky to me though.

 

[Zargon]

Yep. In the last month or two, I cashed in for $300 in Amazon gift cards and $107 in statement credit. Thanks Chase! <3

hellz yeah same thing here, we get a good 5-600 in rewards a year, and pay the bill every month on time.

though I signed up for a new one for the extra 300 in credit and they 'cashed my check' the day after payment was due and charged me fees. I need to call and complain because I mailed it a week early. if it cleared the account the day after it was obviously postmarked in time

Yes many people are terrible with finances. To spend $2800 on a bed set without being able to pay it off cash seems kinda wacky to me though.

he just said he could pay it with cash

I have bought every piece of furniture with a minimun of 12 months no interest.

why not keep the $$$ in your savings making a few bucks in interest for a year before paying it off

as long as you remember where it goes you are fine!

 

[kranky]

Interesting. Do you have a link or can you explain a little further what these "payday loans" are? I've done this type of practice a ton of times with various vendors but I have a great credit report.

Payday loans don't actually report but would be an indication of serious financial difficulty. I had read either on creditboards or on myfico.com forums that consumer finance loans are viewed negatively by FICO scoring as their typical customer cannot get a regular bank loan due to credit problems. And normally the APR is very high.

I read somewhere last year about a CitiFinancial "loan officer" trying to talk a customer into a 25% APR loan because it would save them money. How? They had two credit cards with balances. One was like 15% APR and the other card was like 13% APR. The loan officer said 25% from CitiFinancial was cheaper than 28% - adding 15% and 13% together! Now your first reaction is to just laugh but a customer who would believe that math is the typical customer of a consumer finance place.

A 0% deal that is carried on a regular credit card issued by the retailer (let's say Home Depot) would not be an issue. But if the retailer doesn't issue credit cards (or affiliate with a bank that does) they could hand off the loan to a consumer finance joint.

It's quite possible that a very solid credit report, even if it would be dinged by a consumer finance loan, would still have a great score. Someone with a 750 score for example would still be in fine shape if they got a 20 point hit for a consumer finance loan showing up on the report. So you might have been impacted but not enough to notice or care about. It's the type of thing that could ding your score but you could still have a flawless report (no lates, no chargeoffs, no judgements, etc.).

I don't have any negative information on my report but my score gets hurt for "no recent installment loans" because we haven't had a car loan in many years, and no mortgage. But it's still high enough to not be a problem.

 

[spacejamz]

Just as bad are the 'rent to own' places that advertise stuff for $30/week and people don't realize that is $120/month.

 

[Old Hippie]

You just now realized this? Welcome to a century ago.

QFT.

OP are you 15? LOL!

 

[CPA]

Well, that's obvious to you and to me...but apparently, some people LIKE the 29.99% APR.

It has nothing to do with LIKING, it has to do with living beyond your means. You know, sorta like our government does.

 

[edro]

I pay for everything with gold bullion.